Working Conditions in India

Meha Lodha for bsb GmbH, Cologne, Germany October 2010

Agenda
India and Millennium Development Goals Workforce Structure Labour Regulations OH&S Wages Minimum, Average Employment Security Social Security Trade Unions Industrial Disputes Commonwealth Games Reality about Auto Industry Child Labour, Migrant Labour & Domestic Labour
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Millennium Development Goals (MDGs)

India and MDGs

1. Eradicate extreme poverty and hunger  Poverty 36% in 1993-94 to 27.5% in 2004-05  Very sluggish decline in % of malnourished population 2. Achieve universal primary education  Positive growth goal likely to be achieved 3. Promote gender equality and empower women  Gender parity in education can be achieved  Share of women in wage employment in the nonagricultural sector is likely to reach only 24% by 2015. 4. Reduce child mortality rate  70 per thousand live births by 2015 against the target of 42 per thousand live births
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India and MDGs

5.

contd

Improve maternal health  MMR 36% decline between 1997 and 2006 6. Combat HIV/AIDS, malaria, and other diseases  2.73 million people living with HIV/AIDS in 2002, 2.31 million (0.34%) by 2007  % deaths of Malaria patients has not declined 7. Ensure environmental sustainability  Increase in forest cover  2015 target for access to drinking water attained  Improved sanitation may not reach target 8. Develop a global partnership for development  Remarkable increase in tele-density from 0.67 per 100 population in 1991 to 36.98 per 100 in 2009

Workforce Structure

Workforce Structure
Population 1.15 billion 2009 to 2010 Labour force 520 million Around 28 million organized
Sector-wise Contribution to GDP and Workforce
60% 50% 40% 30% 20% 10% 0% Agriculture Industry % of GDP % of workforce Services
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52%

55%

34% 28% 17% 14%

Data: 2009

800000000 600000000 400000000 200000000 0 0-14 years Females Males Total 165285592 187197389 352482981 15-64 years 359795835 384131994 743927829

65 years and over 31670841 28816115 60486956

1400000000 1200000000 1000000000 800000000 600000000 400000000 200000000 0 Population Series1 1156897766 15-64 years Labour Force 743927829 520000000 Informal sector 491980000 Formal sector 28020000

Agriculture 270400000

Industries 72800000

Services 176800000

unemployed 55640000

Nature of Employment
59% of RW/SE* have no written job contract 33% of RW/SE are temporary employees 46% of RW/SE and 96% of casual labourers not eligible for paid leave 55% of RW/SE and 96% of casual labourers not eligible for social security benefits
* RW/SE regular wage or salaried employees
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Labour Regulations in India

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Industrial Relations Trade Unions Act Industrial Employment Act & Rules Industrial Disputes Act

Wages Payment of Wages Act & Rules, Minimum Wages Act & Rules Working Journalist (Fixation of Rates of Wages) Act & Rules Payment of Bonus Act & Rules

Particular Sections of Society Maternity Benefit Act Equal Remuneration Act Bonded Labour System (Abolition) Act The Child Labour (Prohibition & Regulation) Act Inter State Migrant Workmen Act

Specific Industries Factories, Dock Workers, Mines, Journalists, Merchant Shipping, Motor Transport, Beedi and Cigarette, Contract Labour, Sales Promotion Employees, Cinema workers, Theatre workers, Construction workers, Manual Scavengers Others

Social Security OH&S Factories Act Mines Act Dock Workers Act Fatal Accidents Act War Injuries Act Personal Injuries Act Workmens Compensation Act Employees State Insurance Act Employees Provident Fund & Miscellaneous Provisions Act Payment of Gratuity Act Employment & Training Employment Exchanges (Compulsory Notification of Vacancies) Act & Rules Apprentices Act

Weekly Holiday Act (shops, restaurants and theatres) National and Festival Holidays Act Labour Laws (Exemption from Furnishing Returns and Maintaining Register by Certain Establishments) Act Public Liability Insurance Act 11

Working Hours/Days Law/Reality

Factories Act  Maximum 48 hours a week  Maximum 9 hours a day incl. 1 hour break 12 hours to 16 hours and less than 1 hour break  Overtime double wages Overtime paid in single wages  Min. 1 day paid leave for every 20 work days* No paid leave in many cases  Maternity leave maximum 12 weeks paid Not paid in many cases (unskilled labour) Weekly Holidays Act Not widely followed Minor penalty  Applies to shops, restaurants and theatres  One day closed shop per week  One day holiday per week
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Occupational Health & Safety

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OH&S
Bureau of Indian Standards
 IS 18001:2000 Occupational Health and Safety Management Systems.

Prescribes requirements for an org to form policies for OH&S management systems Apply and obtain license Factories Act, Mines Act, Dock Workers Act National Policy on Safety, Health and Environment at work place
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Occupational Safety Reality

2005 - 11 deaths per 100 000 workers Highest according to ILO (50 000 industrial deaths/year) Under reporting - Govt. reports cover less than 10% factories Contract labourers not covered in statistics Compensation delayed
Adobe Acrobat Document

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Wages

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Minimum Wages Bangalore & Pune

Minimum Wages Bangalore and Pune

Minimum subsistence wage

 Minimum food requirements, clothing requirements, rent, fuel, lighting, children education, medical expenses

National Floor Level Minimum Wages at Rs 100 per day from 2009
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Average Wages
Nation wide manufacturing wage average of 9 engineering industries:  7064 manufacturing units covering 409 000 workers  Iron and Steel, Casting and Forging, Agricultural Machinery & Parts, Textile Machinery and Jute Machinery, Machine Tools, Electrical Machinery and Apparatus, Electrical Apparatus, Prime Movers, Boilers and Steam Generation and Aluminium Industry
Average daily wage rate Rs 210 (3.5 Euros) Average daily earning Rs 257 (4.2 Euros) Average daily wage rate of time-rated workers Rs 211 (3.5 Euros) and piece-rated workers Rs 167 (2.7 Euros) Average daily earnings of of time-rated workers Rs 258 (4.3 Euros) and piece-rated workers Rs 168 (2.8 Euros) Time-rated remuneration more popular
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Salary Split-up
Gross Salary
 Basic Pay Basic Salary Dearness Allowance (Inflation)  Other Allowances (HRA, Medical, Uniform, Conveyance etc)

(-) Deductions


Employees Provident Fund (12% of basic pay)

(If Salary exceeds Rs 6500/month)

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Employment Security

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Lay-Offs
Industries with 50 or more workmen 50% of basic wage and dearness allowance for all laid off work days (maximum 45 days) Employer employs more than 100 workers, prior permission of State Govt. required for retrenchment, layoff and closure
State Govts. normally unwilling to grant permission
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Voluntary Retirement Scheme (VRS)

Generous tax-free severance payment to persuade employees to voluntarily retire Right-sizing workforce >40 years old, completed 10 years service Example - a 46 year old worker who has worked for 20 years in a company will get 30 months pay (1,5 * 20) plus 60% of the basic pay for the next 14 years (upto retirement) Tax-free upto Rs. 500 000 Counselling/fund management/rehabilitation SKF Bearings VRS in 1998 - 600-800 employees Atlas Copco VRS in 1998 107 employees
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Contract Workers
High supply of workers Work for 12-16 hours per day In many industries contract workers are 60-80% of the workforce Contract workers terminated after 240 days of employment No social security for contract workers More working hours and lesser wages for contract workers Overtime without pay or overtime at single rate is the norm Abusive supervisors No remuneration incase of accident Hiring on daily basis Delayed wages and embezzlement Manufacturing activity is of perennial nature and contract labour abolished by law for perennial activities

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Social Security

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Social Security
Program Name Employees Provident Fund (EPF) Financing Employer:1.67-3.67% Employee:10-12% Government: None Withdraw During service - after 5 or 7 years to buy immoveable property, fund childrens education or marriage expenses or medical expenses. OR On retirement or termination of services. In all cases with interest After minimum 10 years of service and attaining 58 years of age or to dependents after death of member. Monthly or lump sum Death benefit to dependents of deceased employee

Employees Pension Scheme (EPS)

Employer: 8.33% Employee: None Government: 1.16% Employer: 0.5% Employees: None Government: None

Employees Deposit Linked Insurance Scheme (EDLI)

* All percentages are percentages of basic wage + dearness allowance

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Gratuity
Lump sum payment on retirement/resignation or death/disability (to nominees or heir) After continuous service of minimum 5 years 15 days wages (last drawn) for every completed year of service
 Example Rs. 500 * 15 * 20 years = Rs 1 50 000

Gratuity ceiling Rs 1 000 000 Applies to all levels of workers

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Trade Unions

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Trade Unions
Trade Unions Act  11 recognized CTUO, 70 000 registered TU  Membership - 2% of Indian workforce Most trade union leaders are outsiders (not workers) and affiliated to political parties Minimum rate of subscription by members of the trade union is fixed at Rs 1 per year for rural workers, Rs 3 per year for workers in other unorganized sectors and Rs 12 per year in all other cases For the promotion of civil and political interest of its members unions are authorized to set up separate political funds
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Works Councils  Not successful  Trade Unions fear erosion of power Scheme for Participation of Workers in Management (1983)  Tata, HMT, BHEL, M&M, Godrej, Boyce  Trade Unions undermines their role, burden for workers

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Facts
79% of casual labourers are not associated with any union/association 53% of RW/SE are not associated with any union/association 34% of RW/SE non-agricultural workers are trade union members

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Factors Affecting Decision to Unionize

Reach of communist Party (if High) Political Activism (if High) Unemployment Rate (if High) Sector of Employment (Public) Type of education (technical) Size of establishment (large) Level of education does not affect propensity to unionize Unionization increases with age of individual, disadvantageous social background
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Industrial Disputes

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7th September 2010

Nation wide strike
 Called for by 9 of 11 Central TU Organizations  No impact in Maharashtra and Karnataka  Impact mostly in Communist dominated regions Kerala and West Bengal  60 000 000 workers participate

Proper implementation of labour laws Stop privatization of profit making PSUs Unorganized workers social security Jobs for people laid off during crisis
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Industrial Disputes Strikes & Lockouts

000 900 800 700 600 500 400 300 200 00 0 993 994 995 996 997 Strike 998 999 Lockout 2000 200 2002 2003

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Industrial Disputes Strikes & Lockouts (recent years)

Item Strikes Lockouts Mandays Lost Workers Affected in Strikes Workers Affected in Lockouts Retrenchments Closures Workers Affected in Retrenchments Workers Affected in Closures 2008 124 153 6847272 408361 51857 9 45 21 88 2009 71 179 6851435 115515 84626 15 32 21 11 11 1 2010 58 20 1476772 88016 13421 6 27

* Provisional half-yearly data for each year. Data not available for remaining half year.
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Commonwealth Games, New Delhi - 3rd to 14th October 2010

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Working Conditions
Contractors thriving Rs 200 to Rs 700 for 8 hours work Urgency payment according to quantity of work Women Minimum Rs 100/130 for 8 hours work Hiring on daily/weekly basis No job security hired and fired everyday No possibility to choose type of work Shelter in tents/roadside near construction areas for unskilled workers Tin shelters for skilled workers 27 workers injured when a bridge collapsed on September 21st. Major protest organized on September 23rd Construction work delayed
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Words of the Supreme Court for the New Delhi Municipal Council
"In this country, payments are made without work being done. Newly constructed bridge collapsed like a pack of cards. 70,000 crores (11.6 billion Euros) are involved. There is rampant corruption in the country..How mindless and lawless are you? No regard for history, no regard for constitution. There is a totally unethical government with no moral values. Money is the only thing that matters. Why don't you convert Jantar Mantar into a hotel or a mall and India will shine?"

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Corruption Index

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Reality about Auto Industry

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Anti-union tactics at Hyundai

Since July 2007, Hyundai Motor India Employees Union (HMIEU) members have suffered from dismissals, suspensions, and transfers. They have also faced the companys widespread use of threats, harassment, and intimidation for joining a union. More than 1300 (HMIEU) workers at Chennai, India, went on strike on 20 April 2009 after management refused to negotiate with the union. On 6 May 2009, 900 strikers were arrested, which prompted letters of protest as well as meetings and demonstrations at Hyundais headquarters in Korea by International Metalworkers Federation affiliates. On 23 July 2009, Hyundai signed a wage settlement with a pay rise over a three-year period. A section of employees began a sit-down strike protesting the wage agreement because management was forcing them to agree to settlement. The company also refused to recognize any established union in a particular plan. HMIL Chairman and Managing Director H S Lheem said that the company would only negotiate with the Workers Committee set up by management, with which the company had recently entered into a wage settlement. As of December 2009, 65 workers have been fired for their union activities and 34 more were in the process of being dismissed
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Rico Auto Industries

21 September 2009 - 1 300 workers from Rico Auto Industries in Gurgaon, India, went on strike after the company suspended 16 workers after they filed for trade union registration 22 September 2009 - at least 35 workers injured when police lathi-charged 3 500 demonstrating workers 18 October 2009 - a Rico employee died during a continuing strike by workers. The worker was beaten to death by men carrying iron rods who were believed to be associated with Rico. 40 other workers were injured. 20 October 2009 - over 100 000 workers from 70 auto companies in the region stopped work in support of the striking Rico workers. Police invoked Section 144 of criminal penal code that bans assembly of over five persons to counter the demonstration. 22 October 2009 - Rico Auto said it was ready to recognize the labour union and take back 9 of the suspended workers Strike lasted 45 days GM and Ford shut factories in North America for 5 days
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Tata Motors
Average wage increase of 12-13% between 2006-2008 Single digit increase in 2009 2010 3 year wage agreement
Benefiting 6861 Pune workers

 Minimum Wages Rs 24 293/month  Maximum Wages Rs 35 221/month  Average Wages Rs 32 656/month

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Child Labour, Migrant Labour & Domestic Labour

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Child Labour Non-hazardous activity - Law

Max 3 hours followed by rest for min. 1 hour. Min 2 hrs education per day* Max 6 hrs per day including waiting time for work and rest Max 1 establishment per day No work between 7 pm and 8 am No overtime Min 1 day holiday per week Notification to local Inspector Ban on children working as domestic labourers or in recreational centers. 24 hour telephone helpline for children
Working Children According to National Census Year Working Children (514 yrs) 1971 10 753 985 1981 13 640 870 1991 11 285 349 2001 12 666 377
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Enforcement of Child Labour Laws

Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 Total Inspecti ons 2881 222856 242269 189842 449042 372504 346212 242223 2353098 Violati ons 25909 11263 7598 10537 16604 28850 26411 16632 143804 Prosec utions 19496 6469 3972 2398 9201 5660 9221 2609 59026 Convic tions 6073 4125 1333 1036 1799 1717 4013 1385 21481 Acquitt als 157 725 356 343 606

300 50 300 00 200 50 200 00 100 50 100 00 50 00

2229

0
642 447

1 9 -9 1 9 -9 1 9 -0 2 0 -0 2 0 -0 2 0 -0 2 0 -0 2 0 -0 97 8 98 9 99 0 00 1 01 2 02 3 03 4 04 5 Violations Prosecutions Convictions Acquittals

5505

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Education System
Literacy Rate
 total population: 61%
male: 73.4% female: 47.8% (2001 census)

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Unorganized Work
Unorganized Workers Social Security Act, 2008
   
Considered deficient Life and disability cover Health and maternity benefits Old age protection Others

94% of labour force is in informal sector

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Migrant Workers
Estimated 20 million illegal Bangladeshi immigrants Culturally and socially integrated $3500 to detect and deport an illegal Bangladeshi Informal sector

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Domestic Workers
Household work washing, cleaning, child care 8 18 hours a day, 7 days a week Approximately 2 million 90% are women, children 25% below 14 years* Majority are illiterate Caste System stigma Bai/Aayah Inferiority/Deregatory Highly Exploited and underpaid, no job security, victims of domestic violence Labor Laws do not cover domestic workers no legal protection and rights National Domestic Workers Movement Rights, Justice and Legislation Minimum Wage Act in a few Indian States
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Sources
Govt. of India  Ministry of Labour and Employment  Ministry of Statistics and Program Implementation  Business Knowledge Resource Online  Labour Bureau Times of India Online IBN Live NDTV India Indian Express The Hindu Businessline Financial Express National Domestic Workers Movement Indira Gandhi Institute of Development Research Munich Personal RePec Archive Japan External Trade Organization JETRO ITUC - Annual Survey of Violation of Trade Union Rights Millennium Development Goals India Country Report 2009 Transparency International CIA Factbook India Country Profile International Journal of Socialist Renewal The Wall Street Journal Europe Edition Livemint.com Wall Street Journal Labourfile.org Gurgaon Workers News Radicalnotes.com Tribuneindia.com Indianews.com Paycheck.in

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